Greaves Electric Mobility, a leading electric vehicle (EV) company in India, has taken a significant step toward expanding its business. The company, a subsidiary of Greaves Cotton Ltd. and the maker of Ampere electric two-wheelers, recently filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise Rs 1,000 crore through an initial public offering (IPO).
Details of the IPO
The IPO will include a fresh issue of shares worth Rs 1,000 crore. Additionally, existing shareholders plan to sell up to 18.94 crore equity shares as part of the offer for sale (OFS). Greaves Cotton, the parent company, will reduce its stake by approximately 8.5%, while Abdul Latif Jameel Green Mobility Solutions DMCC, a major investor, will sell around 39.54% of its holdings.
Currently, Greaves Cotton holds 62.5% of Greaves Electric, and Abdul Latif Jameel owns 34.4%. The IPO price band and minimum lot size will be decided through a book-building process with the help of lead managers, including Motilal Oswal, IIFL Capital, and JM Financial.
Financial Performance
Greaves Electric Mobility has faced financial challenges in recent years. For the quarter ending September 2024, the company reported revenue of Rs 302.2 crore but posted a net loss of Rs 107 crore.
In the fiscal year 2024 (FY24), revenue dropped by 45.5% to Rs 611.82 crore, compared to the previous year. This decline was largely due to a significant reduction in electric scooter sales, which fell by 60%. Total losses for FY24 widened to Rs 215 crore, over ten times higher than the previous year.
While electric two-wheeler sales fell from 1.09 lakh units in FY23 to 47,820 units in FY24, the company saw growth in its electric three-wheeler segment, with sales doubling from 6,870 units to 13,470 units.
Manufacturing and Expansion Plans
Greaves Electric operates three key manufacturing facilities across India:
- Ranipet, Tamil Nadu: Produces Ampere electric two-wheelers.
- Greater Noida, Uttar Pradesh: Specializes in electric three-wheelers.
- Toopran, Telangana: Focuses on electric and internal combustion engine (ICE) three-wheelers.
The company plans to use the funds raised from the IPO for several strategic initiatives, including:
- Research and development for new products.
- Building in-house battery assembly capabilities.
- Expanding manufacturing capacity to meet growing demand.
Currently, Greaves Electric has a strong presence in 27 states, with a network of 309 electric two-wheeler dealerships and 188 three-wheeler dealerships.
Greaves Electric faces stiff competition in the Indian EV market from established players such as Ola Electric, Ather Energy, TVS Motor, Bajaj Auto, and Hero MotoCorp. Despite the challenges, the company aims to carve a niche with its diverse portfolio of electric and ICE vehicles.
Established in 2008, Greaves Electric Mobility offers a wide range of vehicles, including:
- High-speed, city-speed, and low-speed electric scooters under the Ampere brand.
- Electric three-wheelers, diesel and CNG three-wheelers, and e-rickshaws for both cargo and passenger use.
Future Outlook
With its IPO, Greaves Electric Mobility aims to strengthen its position in the EV market and invest in future growth. The company’s focus on innovation, manufacturing expansion, and sustainable mobility solutions aligns with India’s growing push toward electric vehicles.
The funds from the IPO will enable the company to improve its product offerings and meet the rising demand for electric vehicles, helping it stay competitive in a rapidly evolving industry.
Greaves Electric Mobility’s Rs 1,000 crore IPO marks a crucial step in its journey to becoming a leader in India’s electric vehicle sector. By leveraging the proceeds for R&D and manufacturing enhancements, the company is well-positioned to overcome current challenges and achieve long-term growth in the EV market.
